GENERAL COMMENTS:
Light to moderate pressure has slowly trickled into lean hog futures trade Wednesday morning as traders respond to the four-day stretch of strong market gains which developed in the complex. With nearby contracts testing short-term resistance levels, traders focused on profit-taking opportunities at the current market level. This has left prices 20 to 50 cents lower, but still not showing any significant danger of market liquidation.
Cattle futures are posting moderate to strong gains with live cattle trade holding 50 to 80 cent gains at midday, while feeder cattle prices are holding triple digit gains in most contract months.
March corn is up 3/4 at $4.6 and March soybean meal is down $0.90 at $366.7. The Dow Jones Industrial Average is up 23.61 at 37,548.77.
LIVE CATTLE:
Live cattle futures have bounced higher Wednesday morning following s triple-digit gains in feeder cattle trade, combined with underlying support coming from higher beef cutout values on the morning report. Nearby contracts are holding firm gains, but limited additional buyer interest seen through the afternoon, could curb midday gains in the last hour of trade.
Cash cattle trade remains at a standstill, and could easily be delayed until sometime Thursday or Friday. A few asking prices are seen in the south at $174 and higher, but more are expected over the next day or so. Bids are also undeveloped at this point, but could start to be seen any time.
February live cattle are $0.65 higher at $171.425, April live cattle are $0.68 higher at $174.275, June live cattle are $0.78 higher at $171.525.
Boxed beef prices are higher: choice up $1.79 ($281.95) and select up $4.11 ($266.94) with a movement of 83.41 loads (49.06 loads of choice, 9.82 loads of select, 6.56 loads of trim and 17.97 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are the bright spot of livestock trade early Wednesday morning with triple-digit gains seen in all contracts through October 2024. The underlying support developing across the entire cattle market as well as limited price support in grain trade has sparked renewed focus on fundamental buyer interest, especially in nearby futures contracts.
Early-year buyer support in cash feeder cattle and futures trade is starting to develop following the holidays and potential for renewed interest through all cattle markets in the weeks and months ahead. Cash prices last week in the Woodward Oklahoma feeder cattle auction were generally $5 to $10 per cwt higher than the previous sale in December with demand listed as moderate to active.
January feeders are $1.45 higher at $225.225, March feeders are $1.78 higher at $226.65 and April feeders are $1.70 higher at $232.05.
LEAN HOGS:
Lean hog futures have eased in light midweek trade with nearby contracts holding 20 to 50 cent losses at midday. The midweek pressure has little to do with market changes and more focused on traders taking advantage of the strong upward market shift seen over the past four trading sessions. Lean hog futures have reached short term resistance levels set in December, and given the gain of nearly $6 per cwt seen during early January, traders are actively focusing on taking profits. The underlying tone of the market remains firm, with potential upward momentum still possible, but a light to moderate market correction is not out of line given the recent market moves before prices break out of the recent sideways trading pattern.
February lean hogs are $0.25 lower at $71.625, April lean hogs are $0.25 lower at $78.25 and May lean hogs are $0.40 lower at $83.90. Hog Prices are higher on the Daily Direct Morning Hog report, up $2.14 with a weighted average of $45.74, ranging from $41.00 to $46.00 on 4,300 head with a five-day rolling average of $45.16. Pork Cutouts totaled 154.96 loads with 136.25 loads of pork cuts and 18.71 loads of trim. Pork cutout values are up $1.01 at $84.13.
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